What's a Billion

We see more and more big numbers in the news, numbers so big that it's not easy to understand what they mean. A simple way to estimate the meaning is the cost to an individual American. Here are two simple ways to figure out what a billion dollars of U.S. Government expenditure means to such a person:

Way 1 (By the share of the population): The Bureau of the Census estimates the U.S. population to be 298,444,215. So if the Government spends $1,000,000,000 (one billion dollars) your share of it is about $3.35:

     $3.35 = $1,000,000,000 / 298,444,215
           = A billion dollars divided by the population.

Say $3+1/3 per billion spent by the government.

Way 2 (By the share of the money): The Department of Commerce estimates the U.S. Gross Domestic Product to be about $13,220,000,000,000 ($13.22 trillion dollars). So if the Government spends $1,000,000,000 your share is about 7+1/2 cents for each thousand dollars you earn:

   $0.076 = ($1,000,000,000 / $13,220,000,000,000) * $1,000
          = A billion dollars share of the GDP times a thousand dollars.

Say seven and a half cents per thousand dollars earned per billion dollars spent by the Government.

As an example, what has the war in Iraq cost a somewhat prosperous family, of two people earning, $40,000 each? So far the appropriations for the war come to about $350,000,000,000 (three hundred billion)

Way 1:  350 Billion spent by the Government
          2 people
      $3.35 cost per billion spent
     $2,345 TOTAL = 350 * 2 * $3.35
     Not enough to buy a car, but enough to notice.

Way 2:  350 Billion spent by the Government
        $80 Family income in thousands
     $0.075 Cost per thousand earned per billion spent
      2,100 TOTAL = 350 * 80 * 0.075